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tv   The Call  CNBC  April 14, 2010 11:00am-12:00pm EDT

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not with conviction on either way. price target cut to 64 from 68 and mcdonald's upgraded to buy price target there at 75. >> are we done? >> no, you have two whole minutes. >> we have two minutes? shall we sing or dance because -- say what? >> we're up 50 here, we're at 11,000. do you remember the time when the camel was doing its trick and the question of the day that day was dow 11,000 or 12,000, right? >> yes. >> kramer has now came out and said 12,000 is his stake in the ground and you made the famous bottom call. >> yeah. >> you demured on that day and i'm wondering if you have anything -- >> look, look, look. i had a fantastic call in 2000 when i called the top of the
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nasdaq. it was then nine years later before i opened my mouth again and i had the good fortune to be right again on the bottom. check with me in 2018. >> 2018, mark is going to make a call. >> i'm good for one call every nine or ten years. >> mark is a once a decade kind of guy. >> i'm sorry. >> that's all right, a lot of people are once a lifetime. >> most of the time i'm totally confused. i don't know where it's going. >> so, all right. i want you to know about something coming up on street signs today. a giant report coming out on pigs. >> pigs. >> pigs, as in -- >> swine. >> as in earmarks. pork. >> pork. >> and it's a report coming out in a few minutes and we'll have the author of the report talking about the biggest, you know, uses of the earmarks are and then a senator coming on, one of the biggest defenders of earmarks and come on and rebut
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and why they make sense for america. we're very excited for it. >> tell you that right now, stimulus the economy. all right, well, we look forward to that. see you tomorrow at 9:00 a.m. >> time now for "the call." hey, good morning, everyone. welcome to "the call." i'm trish regan live at the new york stock exchange. a market getting a boost from a couple of things, strong retail sales suggesting perhaps the consumer is back. strong earnings numbers from jp morguen and we'll discuss it and what it means for your money. >> i'm larry kudlow. ben bernanke testifying on capitol hill and we'll tell you if he's ready to move up the ti timetable on raising interest rates. >> i'm melissa francis. bothered by government waste, the annual book on pork spending is out. you won't believe how congress spends your money. this is "the call" on cnbc. more positive news for
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investors to cheer about. retail sales raising more than expected in march as consumers stepped up spending and on the corporate front both intel and jpmorgan reporting better than expected earnings. right now the s&p 500 above the 1,200 level. yeah, 1,203 that's up 0.5% on the day. the dow right now also trading to the plus side by about 56 points and that's better than 0.5%. mad money's gym kramer says the rally isn't over yet. >> the turn is happening and those who think that things are getting worse simply because they haven't seen them get better yet, well, come in at dow 12,000 instead of dow 11,000. to all the people on tv and all the gurus, why didn't you tell me things were getting better? i would have been buying. and for that i will happily plead not guilty because i think it is most surely happening right now. >> jim cramer. let's not forget the nasdaq at a
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22-month high and up 21 points on the day and almost 0.9%. let's start out our coverage with mary thompson. >> once again first quarter results and retail and credit card businesses. earnings of 74 cents a share were ten ahead of estimates. and across the board strong trading performance within the investment bank generating over 30% of jpmorgan's $21.8 million in revenue. the good results raising questions about a dividend raise and not saying until the second half of the year, at least. jamie dimon reporting it will not happen. >> two rules, three rules bonus tax rules and we'd like to see some of that clear up before we start using our capital. >> on a press call earlier dimon believes the chance of a double-dip recession are going away and broad-based
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improvements in the economy. reflecting those improvements year over year declines and credit card delinquencies and quarter over quarter mortgage delinquencies. the improvement seen across all geographical levels. now mortgages and credit cards have been two trouble spots for the nation's second largest bank through dimon said the card business could, could be profitable by year end. if improvement in mortgage delinquencies continues, forecast for quarterly losses and home equity could be changed. bank also saw strong demand in business lending and the middle market lending area remained flat. in the first quarter the bank did set aside $7 billion for bad loans and down 30% from the same period last year and also set aside $2.3 billion in a litigation reserve to deal with its mortgage business. the company, though, is kind of mum on that and declined to give a lot of detail on why it is building that reserve. trish and bob, over to you. >> mary thompson, thank you so
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much for that. certainly a lot of good news out this morning, not just from jpmorgan but intel last night. digesting good news on the economic front, on the international front concerns about greece starting to ease. definitely some momentum going here in this market. i want to bring bob pisani in and i want to congratulate him and mr. kudlow on the award for best blog. both of you got one of these webby awards. >> congratulations for the terrific blog. and best writing on the blog. category for best business blog and larry and i from my trader talk were both honorees and several people won. >> god bless, let's keep up the good work. let's keep the pressure on. >> congratulations, guys. >> terrific and very widely read, larry. >> as is yours. let's move on to this market. a lot of momentum that is really going forward. >> again, my point today, if you don't think things are getting any better, you're not baying attention. let's just quickly look at
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what's going to happen in the last 24 hours. the u.s. economic news has been excellent. inflation relatively low and earnings have been better and top-lying growth emerging that we see from the major companies and great economic news overseas from singapore and china and gdp and we're hearing about hiring from intel and -- >> hang on. we want to go to the white house. moments ago president obama spoke with bipartisan leaders on financial regulation and let's listen in. >> one of oour periodic meetings. we're at the beginning of a lengthy work period coming off a very tough work period. one of the things that we're going to be talking about is the economy. i'm going to be presenting to them the latest report from the council of economic advisors on the impact of the recovery act. what we're seeing, i think, is some significant improvement in
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the economy and stabilization, but, obviously, everybody here, republican and democrat, recognizes we still have work to do. that there are too many people who are still unemployed and the housing market is still very soft. too many small businesses who aren't getting credit and we'll spend some time exploring how can we build on the progress that has been made to make sure that ordinary americans are seeing improvements in their own lives. i will also be interested in talking to them about our ability to move quickly on a financial regulatory reform package. i think all of us recognize that we cannot have a circumstance in which a meltdown in the financial sector, once again, puts the entire economy in peril. and that if there's one lesson that we've learned, it's that an unfedered market where people are taking huge risks and expecting taxpayers to bail them out when things go sour is
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simply not acceptable. as a consequence, i'm actually confident that we can work out an effective, bipartisan package that assures that we never have too big to fail again, that consumers are adequately protected when it comes to financial instruments and whether it's mortgages or credit cards or debit cards. that we have a strong mechanism to regulate derivatives. something we have not had. a derivatives market that is in the shadow economy but is enormously powerful and enormously risky. we want to get that into daylight so that regulators and ordinary americans know what's going on when it comes to this huge segment of the financial system. and i am confident that if we work together diligently over the next several weeks that we can come up with a package that serves the american people well and does not put americans ever again in a position where
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they're having to choose between a terrible economic situation or rewarding people for failed policies and bad risk taking. and, so, that's going to be a top priority of this meeting. finally, we've got a range of issues from a supreme court vacancy, a star treaty, that i believe needs to be ratified. a host of other issues related to appointments that we're going to talk about and i'll listen to congressional leaders over the next several months. i appreciate them taking the time to come andiumrapher hopeful this will not only be productive meeting but helpful over the next several weeks.
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>> all right, that is, of course, president obama talking about financial regulation, which is a very hot issue and it is a populist issue and if i have him, i want to bring in john harwood, our ace washington reporter. john, i just want to say this, me, kudlow, free market conservati conservative. i'm very unhappy with what i see some republicans stonewalling senator mcconnell on the floor yesterday. this bill's not perfect, but it's moving in the right direction. i do not understand why the gop doesn't try to tighten the language and make it better and be constructive on this because there is a populist revolt against this bailout nation. >> larry, do i hear you being won over by the obama boom? >> don't go crazy, john. >> i've said this before, john. i think that the chris dodd bill has promise. it's not perfect. but regarding too big to fail. if you tweak the language a little bit, they're very close to bankruptcy court and not, you know, and ending too big to
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fail. that's my point. and i see that shelby is still negotiating, john. maybe you can tell us bout that even though mr. mcconnell is on the floor slamming it yesterday. >> well, first of all, i'm surprised that trish and melissa don't like dow 11,000. let's just go to your question on financial regulation reform. i think you've put your finger, larry, on exactly the cunonedrum facing republicans. do they try to respond to conservatives in their party, business constituencies and their own philosophic convictions and draw a line against the bill? try to stop it altogether or do they participate in the process and change the bill? in any of these situations you could have seen it in health care, republicans try to stop that. have they played along? they could have had a tougher bill on cost control. same thing on wall street regulation. if they wanted to come in and say we'll provide a certain amount of votes if you make these changes. in all probability they would get the changes. but right now democrats think
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they have the high side having one health care and they think the polls are with them and they think even without negotiations they can force republicans, a small number of them, to go along and what you saw from the president was a very measured tone. he's trying to be very chill about it and say, you know, we can work this out. but he knows that he's got the advantage in public opinion. >> although my concern is that it doesn't go far enough. it seems like the language in the dodd bill, larry thinks it's too big to fail. if you leave them an inch to go in, they will. >> it needs to be tightened. no question. your point is well taken. but that doesn't mean walk away. >> no, no, i agree. >> this is a more open process john harwood. health care in my humble opinion was a close process, slam the door on the republican promarket competition. this is an open process and that's why shelby and dodd and them have been negotiating. >> guys, think about what bob corker said.
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bob corker who stepped up after the negotiations failed and tried to work it out and got pulled back and he's been saying in recent days, we made a mistake. we should have made a deal in the banking committee. it's getting worse for us now and some of his fears are about to be realized. >> what about regulating credit to default swaps. that was something that was talked a lot about early on. we're talking about spinning out the prop dust and that is not what was to blame in this meltdown in the beginning. a lot of it was this credit of trading default swaps and i don't think we're addressing it at this point. >> the thing about the derivatives issue and i've talked to senator mark warner about this and i've talked to senator shelby and they've all been on the show, senator corker. why shouldn't they be transparent trading on exchanges? there may be a few small exceptions. a few small exceptions for commercial industries that need this stuff, but most of it
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should trade on exchanges. john, let me just ask you. this is so important to me. we're trying to get mr. shelby to come on this evening after the negotiations today. is it in fact true that mr. shelby is still working with dodd on this bill even while mcconnell is trashing it out on the floor? is that true? is shelby still working sph. >> i think he's still discussing, chris dodd is willing to talk but chris dodd over time has come to the view that at the end of the day richard shelby is not going to want to pull the trigger and make a deal. now, it happened very late in the game on credit cards. remember that, larry. you ended up with, i think, north of 80 votes for that bill. that was a steal mate in the committee, a partisan vote out of the committee and got to the floor and then they made a deal. what dodd and his people say is, still could happen, but i think they're not all that optimistic. >> republicans have been persuaded by some conservative analysts that the $50 billion in the fund is a bailout. but i don't see it that way.
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the $50 billion is essentially -- >> right. >> it's better than position financing and melissa just nailed it. some liquidity into the bankruptcy dissolution, the breakup. you can't do it without that. >> if i have to choose between frank and kudlow, i'm going with kudlow. >> john, always go with kudlow, it will enhance your whole career path. this is a huge political issue, a tea party issue. the gop, geez, all right. >> it doesn't go far enough. i mean, although there's also nothing about the mbs holding a piece going forward. a lot of different ones that could be added. >> i will take a screwdriver and make small adjustments and too big to fail is too close to go and the greatest thing since the creation of white and sliced bread. >> i'm just impressed that john
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hardwood agreed with larry kudlow on that one. >> it was either that way or the other way around. anyway. >> well, well, well. okay, still ahead, we have a market that's continuing to move up here. up 5 1 points and we'll continue to discuss it. the average american cannot avoid uncle sam on tax day. shocking examples of how big american companies are actually getting away with it. just goes to show you complex this tax code really is, melissa. ben bernanke grilled on the hill and debate bernanke's monetary policy.
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fed chief ben bernanke on capitol hill refusing to change his policy. senior economic reporter steve liesman has been listening in on this bernanke testimony and he has more for us. >> be still my beating heart. disappointing some in the market who are looking for a potential change in fed language. no hint that he was ready to end the pledge to keep inflation rates low and despite the exuberance of some on wall
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street the fed chief's enthusi s enthusiasm is much more subdued. >> suggest that growth and private final demand will be sufficient to promote a moderate, economic recovery. to be sure, significant restraints and the pace of recovery remain including weakness in residential and nonresidential construction and the poor fiscal condition of many state and local governments. >> bernanke cited better consumer spending and better business spending and encouraging signs from the labor market but repeated his warnings on the deficit putting it on the path and he added that it would be almost impossible for the nation to inflate its way out of its debt problem because so many government obligations like social security are index to inflation. did write in the last hour or so that the media is being too down beat about bernanke. i respectfully disagree. he thinks there is more optimism than the headlines suggest. >> stay with us, steve, we want to talk some more here about general bernanke and his refusal
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to move up the time table. i want to bring in diane and also cnbc's rick santelli. listen, i mean, we're in a situation where the majority of people, guys, say this economy is in an improving state. when we look at the hearing now, you look at the retail sales numbers just out today, diane, it seems like things are improval. what is the real problem? how do we keep this momentum going forward? >> jobs. we are seen some good news on jobs and not enough good news on job. the longer people are unemployed, the harder it is to get them back and i agree 100% with steve that i don't think they're disguising any optimism out there. i think the fed is very cautiouses and they've done a lot to get us to this recovery and they don't want to blow the recovery at this stage of the game. that is their biggest concern. >> is the fed being overly cautious in your opinion? >> i think they were so overly
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aggressive based on reasonable interpretations of their charter that to pull back too early is just illogical and many in the marketplace have succumbed to that form of thinking many, many months ago and i think they're being too easy but it made sense when you go overboard you don't withdraw too early. i'm not saying i agree with it. i'm not saying i agree with it. >> oh, heck, i expected rick santelli to be the hard money guy, so i'm going to be the hard money guy. >> inflation is really low, larry. inflation not a big problem right now. >> give us a dose of cowboy monitorism. >> i want wall street to be scared to death of what the fed is going to do. look, the retails sales number up 7.6% in the last 12 months. the cpi all items up 2.3% in the last 12 months. there is no emergency.
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there is no excruciating deflation and thomas hoenig is exactly correct. the fed is creating a financial bubble with excessive risk taking proposal and that is something the fed should deal with. they are too loose too long. that's the problem here. >> you're right, on every account, larry. but the world we live in has to interpret a reality, not what we desire. >> rick, let's add, the world we live in still has 9.7% unemployment. >> larry, where are the bubbles? i want to know what bubbles you're talking about. >> he says there's a bubble in agricultural land out in kansas city. >> with all due respect to tom. >> he's a breath of fresh air. >> i agree. >> i like tom, too, come on. >> what hoening is warning, if this interest rate continues long after the emergency. you guys are saying not until next year. if it continues the threat, the threat is that we will repeat a
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financial bubble with excessive risk taking because it's too cheap to borrow. diane swan, you're correct about the unemployment being too long. i happen to agree with that. but i would say to you that is a function of lousy fiscal policy. we keep extending unemployment benefits. that is not a fed issue. that is not a federal reserve issue. the fed cannot control the length of unemployment. >> at this stage of the game you really want to cut unemployment insurance? we know over time we don't want to be a socialist state, but come on, larry, that's important support to consumer spending you're seeing out there. >> one of the concerns here -- >> quoted by "wall street journal" editorial page if you keep extending the unemployment rate, guess what you get, more unemployment. i'm saying it has nothing to do with the zero interest rate. there is no deflation and no emergency and we are in a v-shaped recovery. >> one of the real concerns here and, rick, i'll throw this one
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back at you. when we look out at the fed, they try, they keep trying, but very rarely get this right. it is a very difficult -- >> hold on, trish, what's the evidence for that? do you have any actual evidence? >> steve liesman, look at the last bubble. >> you can find many reasons for the last bubble. don't use that alone. >> can we get a 30 -- can we look, trish, at a 30-year record of bringing down inflation all the way through most of 2005 that was one blip up in inflation in 2006 over almost three decades, if i'm counting correctly. >> guys, i think that the fed deserves some responsibility. >> thank paul volcker for all of that, steve. >> deserve some of the blame. >> hold on, are you arguing? >> i can't hear anyone right now, sick santelli, i'm going to go over to you. >> paul volcke made a difference and it's because of his efforts in the early '80s that inflation
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was contained for many years. in terms of the fed getting it right, it's not a task that any group or individual could ever succeed in. trying to manage this economy with the string pulling at the short end is just a fallacy. you can't do it. >> put up the inflation numbers. that's what they're responsible for. we had relatively low unemployment and relatively low inflation. >> you can't tell me there was no inflation in housing. >> broad-based inflation. >> that's an important point because the idea that the federal reserve is supposed to work asset prices into its policy is something that is very controversial and will lead to a whole different set of government control over the economy that i believe my good friend larry kudlow would not support. >> i agree with that. >> very complex issue and there's no easy, easy lever to say exactly. when japan decided to deliberately pop asset bubbles it cost them more than -- >> different generation. diane, all i'm saying is, diane,
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all i'm saying is the emergency is long passed. and we are still operating at zero interest rate. >> yes, we are. >> the emergency is past, but the economy is still weak. >> a mistake they made in the early 2000s. i just want to throw in one number no one likes to look at this number. yesterday it was reported that import price inflation was up 11.4% over the last 12 months -- >> that's a good number to throw in there. >> v-shape commodity rebound going on. >> people are declining their purchases. >> we're going to leave this and i'll point out one last thing. >> feds should look at it. >> in 2007 the fed was keeping interest rates high when everybody was saying we have a lot of warning signs of a lot of trouble brewing and the expectation was that they should have brought them lower. it is a very difficult, very hard thing to get right. >> the fed had raised rates consistently. i don't know what history you're talking about there. >> listen to tom hoening, he
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speaks the truth. the man is a truth teller. he is einsteinian. they should be heeded and listened to. >> we're going to leave it there. i think we can all agree, it is a very tough job for mr. bernanke. >> it is a tough job. >> oh, my gosh. when we come back, major u.s. corporations avoiding uncle sam on otax day. we'll tell you how they're getting away with it. plus, it was the strongest first quarter for global m&a action since 2008. two insiders give you their take. boss: so word's gettin' out that geico can help people save in even more ways -
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on motorcycle insurance, rv, camper, boat insurance. nice work, everyone. exec: well, it's easy for him. he's a cute little lizard. gecko: ah, gecko, actually - exec: with all due respect, if i was tiny and green and had a british accent i'd have more folks paying attention to me too...
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apple says it would delay for one month the international launch of its ipad due to stronger than expected first week sales in the u.s. apple shares risen 15% this year and currently trading higher, again, by about 1.2%. so, think blue chip companies are paying the same tax rate as you? think again. scott cohen joins us with some
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examples of how american companies avoid uncle sam on tax day. >> we all like to lower our tax bills, verizon is one of many companies that did. the company posted billions of dollars in profit last year and paid no federal taxes and got a tax rebate to boot. one loophole group is crying foul. the company posted $10.3 billion in profits last year. did it owe money to uncle sam? no, verizon got a tax rebate of $611 million and the labor-backed citizens for tax justice which crunches the numbers on corporate tax breaks says that's wrong. >> if you look at their annual report, one of the biggest items is that they had lobbyist the congress to pay them in tax cuts for doing what they do which is put out fiber optic lines and other investments. they're getting the government to subsidize their local business activities. >> it's not quite that simple. how did verizon do this?
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in large part thanks to the obama stimulus plan which sped up plants and equipment. verizon was able to defer more than $1 billion in federal taxes last year. but, verizon will tell you there is a catch, those stimulus tax breaks are over now which means some of those defoerred taxes ae already coming due. in a statement the tax justice are just plain wrong and the group misrepresents the verizon tax profile. those deferred taxes are significant and verizon lists its effective tax rate at the annual report at 10.5% last year, which is still not a bad deal. but if you figure in the taxes the company pays on its minority interest with vodiphone, it's more like 29.2%, which is not far below what the average individual is paying. melissa, the government giveth and the government taketh away. they did get a tax break this year. >> these tax breaks are wrong, i hate them. but the big problem is, the
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marginal tax rate on american business is substantially higher than business around the rest of the world. that's the problem with this. >> larry, the statutory tax rate and the effective tax rate and two different things. and people will tell you the effective tax rate in the u.s. when you figure in these tax breaks is not that far out of line. >> i just feel these are special situations and most corporations wind up paying the marginal tax on the extra dollar earned and we're not helping them on this one bit. >> all right. be sure to catch our cnbc special "taxing america" with bill griffeth tomorrow at 1:00 p.m. eastern. we'll gather the smartest minds and focus on fixing our tax system. larry has a few comments for them tomorrow right here on cnbc. coming up next global m&a deals and how they're shaping up in 2010 and what it means for investors right now. larry? you won't believe the
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federal pork barrel spending in the federal budget. where your hard earned tax dollars are going and wasted. right here on "the call."
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welcome back, everyone. global m&a deals reached over $570 billion in the first quarter of 2010. how is the second quarter going to be shaping up? what can we expect for the rest of the year? joining us right now to dissect it all we have frank philip and also mark schaefer, co-head of
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global m&a at citi. thank you for coming down to the new york stock exchange. mark, i'll start with you. a lot of activity certainly within the last quarter and certainly within the first quarter this year. is this something that we anticipate is going to stay on track? >> we're seeing pretty strong evidence of recovery, but it's fragile. and in terms of recovery what i'd say is the volumes are clearly up quarter to quarter, 20%. year to date it's about 30% higher. much broader industry participation first quarter last year, 51% of the volumes for two industries health care and fig. this now 10% to 20% six sectors. globalization, big theme. more emerging market business and around the technicals, some normalization. premiums are kind of coming back to the 30% level relative to last year. some of the correlations we look at, you know, to the correlation to the vics and consumer confidence, s&p, correlate pretty positively. all in all, it feels pretty good.
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tremendous uncertainly when i say fragile it's tremendous uncertainty around the economy and around what's going on in washington and so on and so forth. so, our clients are moving ahead but there's caution. >> you know, frank, let me ask you about that. certainly something that affects a lot of companies, a lot of investors when they look at what's coming out of washington right now. what does it do to a company's decision whether or not they'll go out there and make a major accusation? are they concerned about this uncertainty? >> trish, clearly, the enemy of transactions is uncertainty -- >> uncertainty in washington. >> anywhere. in the economy, in washington. i think you even have it in europe some of what is going on with greece. in the uk where there might be a hung parliament. but businesses need to know what the next engineer ayear and yea that is going to look like from the regulatory attacks
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perspective. right now you know that change is coming and no one really knows what that change is and i do think tremendouses activity and everything mark said is correct but we're not seeing the level of deals that i was expecting and i think we can see because of that uncertainty. >> i think melissa francises wanted to jump in with a question. melissa? >> mark, the problem with the troubled business during the downturn is that financing was so difficult and what is the characteristic of deals we're seeing now? are they mostly strategic in the sense that you're not seeing private equity and, you know, other buyers out there. are they mostly companies buying revenue streams and how difficult is the financing right now? are they doing it with cash? >> the capital markets have been in terrific shape. the equity market is pretty well reported that it's trading at very attractive levels. credit market has been on fire and plenty of opportunity. about 70% of the deals in the first quarter were cash and, so, that's understandable taking
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advantage of just how robust the capital markets are. you know, i do think that as long as that trend continues, that will be extremely helpful to us. you know, as we continue to -- >> but there was a phobia to a lot of leverage and that leverage is how part of the reason why we got into all these reasons in the first place has that got away or is leverage back in fashion? frank, what do you think about that? >> i don't think leverage is back in fashion. in fact, what i'm seeing financing is back and private equity is back and certainly not as highly leverage as they were two, three, four years ago. the other thing to remember is that most major companies really cut back very quickly when lehman collapsed. they cut their stock buy-back programs and they cut dividends and they cut employees and they built a tremendous cash pile probably s&p 500 companies have
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another 100 to $150 billion than they did when lehman went under. >> that is basically suggesting that they have all this money that is sitting there and somehow put it to work and in an effective manner and issuing a dividend or going out and making some kind of acquisition. for the average investor out there, i mean, if you're getting into this market right now, there's got to be some incentive to think about m&a and how it could affect how you're investing in a sector. how does that work? what is that relationship? >> no doubt. typically when m&a is in an upswing and a lot of odeals. positive correlations and it helps, frankly, it is one attribute that people look at for healthy equity market. the deals are largely steejic and going back to the earlier point have improved and they're back in business. some sell sides and buy side
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work and nothing like it was during the boom times. a lot of cross border transaction activity and that's up and all of this is fairly positive in terms of longer recovery. but let's not kid ourselves. we're not going to see a $4 trillion market like we did in 2007. the market has shrunk pretty dramatically. >> that's probably healthy. >> that's probably healthy. private equity was never, you know, a huge component in the market, except for really 2006 and 2007. so, the fact that they're back at more traditional levels and borrow oing at more traditional levels, again, i think that's part of recovery and i think that's a positive. >> frank aquila, mark schaefer, thank you so much. we appreciate your perspective. quick programming note. david faber will be live in new orleans and he'll have an exclusive interview with wall street's biggest m&a players including the head of investment at jpmorgan and we had some of
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the biggest ones right here. melissa, back over to you. when we come back, opec out with its monthly oil report and we'll tell you where they see oil prices heading in the coming months. we'll find out where your hard earned tax dollars are going. the annual pig book is released. all the details of all the pork barrel spending throughout the federal budget. stay with us, we are "the call."
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welcome back, everyone. check out toyota. halting sales of lexus suv a day after consumer reports said it had handling problems. toyota trading up almost 1%. melissa. crude on the back of surprising inventory data. take a look where oil inventories are trading right now. they're up almost two bucks on the day, better than 2%. 85.89 the last trade there. sharon epperson joins us live from the floor of the new york mercantile exchange. sharon? >> seen a spike in prices since that number came out a little over an hour ago and the bulls in good steady. the reversal that we saw on
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record volume here to above $84 for a the barrel and remaining above that level before the number came out and then we get the surprise decline in crude supplies and everyone was expecting a bill and we have seen bills for ten straight weeks and that is something that folks are paying attentions as we make our way back to the $87 level. sure omecis saying $70 to $80 is the range because oil fundamentals look like it but we are looking at prices that seem to be in a new range right now and veteran trader here on the floor with international trading. we have been talking about this range that oil prices have been in for february and march and now in april it looks like a whole new range and right now it looks like we're back to going towards that 2010 high, what do you think? with opec seeing 70, 80, yesterday's settlement above $84 and today we're $2 higher and we're at the 15-month highs.
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we're staying at 15-month highs. opec saying 70, 80, hard to believe. >> melissa? >> still bearish signals out there in the -- >> more time, melissa. >> yeah but still bearish signals out there. if you look at the 12-month conserve meaning it is cheaper to buy oil now than it is if you look out 12 months down. that's always a bearish signal. if you look at supply, we're below, or above the five-year average right now and no more below we were a year ago and still a lot of supply out there in the market. there are bearish indicators out there, right? >> why are we at $87? >> you tell me. >> the market is better than we look. look at the financials and look at gold. you know, dow at 11,000. where is the double dip? i love this market. >> it's a v-shape global recovery. gold, commodities, oil, they're all moving together. >> they're the sellers. where are they going to come in
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to knock this down. we should be at $68 and why are we at $87. that's telling me something. >> toss it back to you but the fact that we're seeing record volume on friday and then another record volume on saturday and shows a lot of action that has perhaps not as much to do with the fundamentals but continue to watch them very carefully. >> fund money in there and also looking at gold higher, as well. we have a quick programming note next thursday at 8:00 p.m. eastern carl anchors alternative energy and where we stand "beyond the barrel the race to fuel the future." "power lunch" is coming up and sue herera is live to tell us what's in store. hello, sue. >> hi, larry. you would love this because the buzz here is pretty positive. it seems that business is better. we're going shopping for retail stocks and to do that we have four top ceos joining us. the head of the children's
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place, she just took over in january. she's going to open dozens of new stores this year. then phillips-van heusen, bj's wholesale and iconix and two economic minds join us to talk about the war on wealth and financial reform. we got it all for you on "power lunch." >> sounds like a terrific show. sue herera, thanks so much. coming up next, a new report on pork barrel spending. you're not going to believe where your tax dollars are going. >> look at those pigs. stocks to watch heading into this afternoon's trading session. right here on "the call." (announcer) we're in the energy business. but we're also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here. we live here. these are our families. and our neighbors.
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and by changing lives we're in more than the energy business we're in the human energy business. chevron.
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a shocking new report out on the amount of pork barrel spending in the federal budget. oink, oink. hampton pearson is going inside the pig book looking where your tax theres are going. >> this year's shocker pretty in pink edition when it comes to earmarks lawmakers spending on pet projects congress has gone on a diet. not quite worthy of the weight loss of the biggest loser, only
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9,129 projects this year, a 22% decline from the 2009 fiscal year and the $16.5 billion in taxpayer dollars is a 15.5% decrease in spending. the defense bill contained 59% of the total pork, 35 anonymous projects worth $6 billion. democrats get credit for reform so the last two years lawmakers names have appeared next to their pet project earmarks and public outrage still plays a major role, as well. >> well, it's good news. it's still above the historical average and it's still not at the level that president obama promised when he took office, which is $7.8 billion. and not only would everyone standing here with me today prefer that it be zero earmarks, every taxpayer would also like that to disappear. >> now, the pig book crowds mississippi senator thad cochran as the king of pork.
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240 earmarks and among the candidates for the oinker awards, $4.4 billion for wood utilization research and $465 million for an f-35 jet engine, the pentagon says, it doesn't want. while earmark spending is down by 16%, every other category of federal spending is up. larry? >> i noticesed that, hampton. thank you very much. a programming note, the author of "the pig book" will be tom schatz will be on "street signs." a quick break and then the list of stocks to watch as we head into afternoon trading. you are watching cnbc, first in business worldwide and we in business worldwide and we will be right back. i switched to commodities.
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